Mississippi Lien Law Passes Senate, Moves to House

February 19, 2014

The process of enacting a new lien statute in Mississippi took another important step forward this week as Senate Bill 2622 sailed through the State Senate, passing on a 48-2 floor vote. Three minor amendments were negotiated in advance and included in the legislation as approved, but none of them are expected to affect subcontractors and materials suppliers in a meaningful way.

Area subs and suppliers have scrambled to draft new construction law payment protections since last year's ruling by the US Fifth Circuit Court of Appeals in Mississippi that affirmed a lower court's decision which found the state's Stop Notice statute unconstitutional. Stop notices were previously one of the only ways by which subcontractors and materials suppliers could pressure a general contractor into payment, but the ruling essentially removed payment protections for any party who didn't have a direct contract with the owner, according to Chris Ring of NACM's Secured Transaction Services (STS).

SB 2622 was introduced alongside a similar bill in the state's House of Representatives, but that legislation was allowed to die as the newly-approved Senate bill moves to the state House Judiciary Committee for further consideration. STS will continue to monitor the bill's progress.